LONDON - The British Ministry of Defence's powerful Investment Approvals Board (IAB) is scheduled to meet Feb. 25, with the key item on the agenda likely to be selection of contractors to supply the British Army with two major new armored fighting vehicle capabilities.
Together, the Future Rapid Effects System (FRES) Specialist Vehicles (SV) program and a significant makeover for the in-service Warrior infantry fighting vehicle could eventually be worth up to 5 billion pounds ($7.7 billion) to the winning contractors so long as the programs are not blown off course by the black hole in government finances and an upcoming strategic defense review.
The contest pits BAE Systems against U.S.-based General Dynamics and Lockheed Martin in competitions which will help dictate the future shape of the British-based company's armored fighting vehicle sector.
BAE is offering its CV90 against General Dynamics UK's ASCOD SV vehicle fitted with a Lockheed Martin UK turret designed especially for the FRES requirement.
For the Warrior Capability Sustainment program, BAE finds itself competing head-to-head against Lockheed Martin UK.
The IAB - which includes top scientific, military, procurement and finance officials - will be considering recommendations endorsed Feb. 9 by the investment board of the MoD's procurement arm, the Defence Equipment and Support (DE&S) organization.
The recommendations remain for the moment a closely held secret by the MoD. Although the Sunday Express newspaper here recently quoted sources saying General Dynamics had secured the FRES SV bid, that has not been confirmed.
Defence Procurement Minister Quentin Davies told Parliament earlier this week that he would announce winners of the FRES and Warrior bids "once the assessment is complete and the investment decision approved."
If approved by the IAB, the recommendations will then pass to various government departments for signing off.
To help smooth the approvals process, the Treasury, unusually, embedded officials in the project teams leading the DE&S procurement effort.
Davies has previously said he will announce the decision next month. Failure to meet that timetable could see at least one of the programs delayed or eventually canceled. The U.K. government has been racing to select contractors for the two programs ahead of a general election being called, most likely for early May.
A roughly six-week period of purdah, when no new or controversial equipment purchases or other initiatives can be announced by the government, comes into force during the pre-election period.
With all three major political parties saying they will hold a strategic defense review immediately following the election, that could further delay progress on the vehicle programs.
Most industry executives here reckon the program to upgrade nearly 450 Warriors with a new turret and gun, plus improvements to the electronic architecture and a new armored system, is the least likely to be impacted by the need to cut the already overheated equipment budget.
They are less certain, though, about the fate of the FRES program. Although they say they have so far seen no evidence of a government weakening in its intention to pursue the project, concerns about the future timing and scope remain.
A project to buy the Piranha five-wheeled vehicle from General Dynamics as the utility element of the FRES requirement was axed by the MoD after it failed to agree on terms with its preferred contractor. The MoD also had a change of heart regarding its immediate priorities after it acquired large numbers of mine-protected patrol vehicles as urgent operational requirements for Afghanistan.
The FRES SV contract is to provide a common platform for what could eventually be a fleet of more than 1,000 specialist vehicles covering roles which include scout, command and control, direct fire and ambulances.
The initial deal, though, is for the design and development, but not production, of a group of FRES SV vehicles known as Recce Block 1.
The priority is to replace the Army's existing CVR(T) scout vehicles with a new machine fitted with the CTA International's new case-telescoped 40mm cannon.
CTA International is the BAE/Nexter joint venture mandated by the U.K. government to supply its weapon system for the FRES scout and the Warrior upgrade.
The CVR(T) is on its last legs and the Army is desperate to replace it as soon as possible. The intention is to purchase 245 FRES scout vehicles along with recovery, repair and protected mobility machines with an in-service date of 2015.
Recce Blocks 2 and 3 and a medium armor direct-fire vehicle would follow. The FRES program as it stands is completed by future requirements for a wheeled utility vehicle and maneuver-support vehicles.
All three companies in the two competitions have inked deals with the Defense Support Group for various degrees of production and assembly following the government's publication last year of an armored vehicles strategy which put the state-owned contractor at the center of its sustainability plans for the sectors.